However it’s not all full speed ahead. For a start, Visa and MasterCard are not yet in the same place with regards to acceptance. MasterCard allows low cost chip and signature solutions for mobile POS, such as iZettle and SumUp (both of which provide free chip card readers and charge a flat 2.75% transaction fee, although iZettle also charges a £20 upfront ‘fee’ which then entitles the merchant to £20 of free transactions). Visa however does not allow its cards to be accepted in these devices.
At the recent Vendorcom Cards and Payments Thought Leadership Conference, Visa Europe’s Head of Mobile POS and Acceptance, Caroline Drollet, explained the Visa position. Visa’s rules for mobile POS acceptance are:
- honour all cards;
- do not reduce the security proposition;
- ensure a consistent user experience.
To meet these conditions, PIN entry must be possible in Chip and PIN markets and the reader must be able to read mag-stripe cards from migrating or mag-stripe markets (i.e. the US).
One solution is to use e-commerce solutions in face to face environments, as long as the card details are entered into the cardholder’s phone and not the merchant’s phone. This allows iZettle and SumUp merchants to accept Visa cards providing the customer has a data enabled smartphone and is prepared to enter their card details. However this means higher interchange fees and liabilities than a card reader solution.
Some device manufacturers claim that it’s unfair to expect them to provide PIN security because of the costs it adds, making the device too expensive for micro-merchants. However both Dan Wagner of Powa Technologies and Stafford Masie of thumbzup were keen to point out that they are well on in the process of bringing Chip and PIN solutions to market at sub $50 manufacturing costs.
First to come to market in the UK in mid-October were Payleven. They are aiming to address the micro-merchant market, matching iZettle on transaction fees. Just as Adyen do, they are utilising the Miura shuttle device for their solution.
Adyen’s approach is a little different to that of Payleven though. Coming from the e-commerce world, Adyen’s customer base are looking for integrated multi-channel solutions. They want one place for their card transactions whatever the channel. Adyen claims their platform can accept any card payment anywhere in Europe, which must be attractive to merchants who operate in more than one country.
Adyen says it sees mobile POS as being more than just a way to address the mobile merchant, Adyen’s customers are looking to use mobile POS to change the way they interact with customers in the high end retail environment, creating tablet assisted payments, making payment a more personal experience. When asked about electronic receipts in a retail environment, Adyen said that the feedback was mixed, so they will also provide a Bluetooth printer option for customers who require a paper receipt. Whilst Adyen are happy to sign up individual or small merchants, they are more focused on providing a complete payment service. This payments as a service is reflected in their pricing structure, where the mobile POS reader is purchased for €99, there is then a €10 per month service fee, with transactions charged on an interchange+ basis.
Powa are taking a similar approach, Dan Wagner told the Vendorcom meeting, with mobile POS being seen as a way of allowing retailers to change the way they interact with their customers, providing instant payment, or personalised payment in store. Just like Adyen, Powa are from an e-commerce service background. They see themselves more as an infrastructure supplier and enabler, providing white label solutions to existing acquirers or companies looking for a face to face POS solution. FNB have already signed up to mPowa for their solution.
Intuit, who is an established player in the US mobile POS market, has also announced that they are to pilot a UK Chip and PIN mobile POS solution, integrating with its QuickBooks small business accounting package.
So, from being under-served in the mobile POS space, the UK’s micro and mobile merchants are about to benefit from a wealth of options, with a wide spread of different approaches on offer, and security, convenience and trust being the key elements. But will Visa and MasterCard align their stances? Their current differences cause uncertainty and that does not help the merchant or cardholder communities.